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We Have a bit to go yet

I know the Administration is touting the "End of the Great Recession"  (Remember W's announcement of the end of the War?)

Well, last night I was at an event in NYC hosted by a major restructuring law firm.  It was a very nice event - subdued but still very nice.

The restructuring firms were busy but some furrowed brows - either companies were pulling out of the crisis or they were going under.  Where's the restructuring fest we all expected?  

Many of the private equity firms had just basically thrown in the towel with no investments over the past year and trying to maintain liquidity.  Folks were looking fairly white-around-the-eyes as they were talking to me about opportunities and could I find some capital to invest.  Right.

So where is the fun?  

Numbers are coming out Friday on employment and I predict 10.1% unemployment.  A non-testament to the stimulus plan and thank goodness the US Senate passed an unemployment benefit extension.  A lifeline to millions.

So where is there growth?  Ummm - let me think here - what have I been saying?  Emerging market economies and Asia in particular?  Remember?  Take a look at the attached chart drawn from Bloomberg.com.

So here's the quandary - you are are private equity fund manager and have money in typical US companies and have discovered that they are not as good as you thought from all the quant analyses - oops!  Who knew that regression analysis doesn't really project the future!  It s mathmatical tool - fool.  

That's certainly what I heard from the investors last night.  So what now?

Emerging markets?  I mean seriously - if you don't have an asset allocation in Asia,  I will not be a very pleased person with you!

Maurice Johnson

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