A story last month in the FT quoted several sources who argue that the sovereign debt crisis in Europe is a factor that’s driving up correlations among asset classes lately. “It poses a big challenge for risk managers and portfolio managers,” explains Pavan Wadhwa, head of global interest rate strategy at JPMorgan. “The more correlated the underlying assets in your portfolio, the less diversification you have.”
Daily Archives: October 28, 2011
September’s Rebound In Consumer Spending & Income
Personal income and spending jumped in September, offering an encouraging reversal from August’s sluggish pace. The revival was particularly strong for consumer spending. The numbers aren’t all that surprising in light of yesterday’s mildly upbeat GDP report for the third quarter. Surprising or not, today’s spending and income numbers reconfirm the statistical case for arguing that there was no sign of a recession in Q3. Deciding what happens in Q4 is guesswork, of course, but there seems to be a bit of momentum in the macro numbers these days and so a bit of optimism is the new new thing again… at least for the weekend.