How Markets Could Shift to ‘Risk Off’
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Feb. 1 (Bloomberg) -- The huge deleveraging in privatesectors in the U.S. and elsewhere, the unresolved frictionsbetween northern and southern nations in the euro area and theneeded shift in China to a domestically driven economy suggestthat the current “risk-on” investment environment may collapse.
Bullish investors will probably be forced into an agonizingreappraisal by a shock, as was the case in limited ways with theeuphoria over the Federal Reserve’s first two rounds ofquantitative easing and its Operation Twist, which involvedswapping short-term debt for long-term securities.