Viewpoint

Absurd and unsettling are the adjectives that have best suited financial markets since late April. The level of correlation among the various asset classes spiked to nearly 100%, driving equities and precious metals, for example, simultaneously towards very dangerous technical levels.

Going on a diet rarely puts people in a good mood, although it does do their cardiovascular system a world of good. Post-developed populations are prone to obesity, no denying that, and public and private debt suffer from the same tendency.

May lived up to its reputation as a good month to sell and go away. Equities and many segments of fixed-income pulled back sharply, with sovereign debt again serving as a safe haven. Haven?

When the Banque Privée Edmond de Rothschild put together its first fund of Hedge Funds over 40 years ago, it started a tradition of careful manager selection that continues to this day.

In our February 2009 issue of Trends, entitled "The Maginot Line", we wrote: "After the frog-and-ox story of Iceland, now it is the Baltic countries and Greece that are starting to crack while Hungary, Portugal and Spain totter. The financial credibility of governments has been thrust to the fore. (...) Will the euro hold up if its biggest members have to bring the little ones into their scope of consolidation?"