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Inside Look: Bloomberg Link’s Sovereign Debt Conference

January 31, 2012

Bloomberg News Executive Editor Dan Moss speaks with European Central BankExecutive Board Member Jose Maniel Gonzalez-Paramo, who says there are signs investor confidence in the euro-area economy is returning and growth may be about to rebound.



As members of the global elite gathered on the Swiss slopes for the World Economic Forum, key discussions about the economy also took place in downtown Manhattan at Bloomberg Link’s Sovereign Debt Conference located in the sleek New Museum on the Bowery. O.K., so the scenery wasn’t as spectacular, but the issues being addressed were equally as important.

I knew it would be a momentous day from the start—the room was packed with some of the most recognizable economists, policymakers, investors, and money managers. The snacks were delicious, and in the first 10 minutes of the program, the head of sovereign ratings for Standard & Poor’s declared that his company was likely to downgrade Greece to “selective default” next quarter. It could not have been more timely, given that the conference took place as debt negotiations between Greek bondholders and the government hit another snag, and uncertainty over a deal appeared more elusive than ever.

Peter Orszag, former director of the Congressional Budget Office and now Vice Chairman of Global Banking at Citigroup discussed how the U.S. needs mechanisms to combat political “inertia.”

The range of views on Europe’s debt crisis and its endgame was all over the spectrum. Over the course of the day, we heard from the ECB’s head of market operations, who noted an increased sense of confidence in financial markets since December, predicting only a mild European recession. According to Erik Nielsen, an economist at Unicredit, the worst of the debt crisis turbulence is behind us. Others weren’t as cheerful, including Steve Hanke of Johns Hopkins, who opined during my panel on the euro, “Greece is going to implode…the game is completely over.”

Beyond economic predictions, panelists offered plenty of investment tips. Michael Litt, the chief investment officer of Arrowhawk Capital Partners, said U.S. investors will make a “massive” shift out of bonds and into stocks within the next 12 months. Axel Merk of Merk Investments recommended buying commodity currencies, and Julian Callow, head of international economics at Barclays Capital, says the euro will fall to 1.15.


Overall, the tone was decidedly more positive on the U.S. economy, with Byron Wien of Blackstone predicting 3 percent growth this year and the unemployment rate falling below 8 percent.


Between the provocative predictions, lively debates and timely, in-depth conversations, for a super eco nerd, like myself, and plenty of other curious audience members that I met– it was a blast. We even got to take home the goldfish bowl centerpieces as souvenirs. And, the temperature in New York City was warmer than in Davos.

 Sara Eisen is a markets reporter for Bloomberg Television, co-host for Bloomberg Radio’s Bloomberg on the Economy, and emcee of the event