German bonds are preferred in US Treasury bills

Think about the scenarios of crisis when the markets seem to be still close to the precipice may seem superfluous. Yet this is what must do fund managers, because the monetary and fiscal policies accommodating pipes since the crisis of the "subprime" in 2007 can be maintained forever without risk of hyperinflation or bubbles even worse than that of the credit.

Leader of Goldman Sachs Asset Management for Europe, Africa and the Middle East, responsible for the management of this House rate products, Andrew Wilson is not very optimistic to response. "The central message is that the return to normal will be extremely difficult and that the risk of policy mistakes are very high, he says." Europe is a particularly dangerous area. "And the expert noted that the only comparable example is that of the Japan, of which equity markets are still 75 below their highest historical...

The tightening of accommodative policies started in countries such as China, the Australia, Israel, and the Brazil. It would happen rather well if the euro crisis had caused a sudden return of aversion to risk. But in Europe and the United States, it seems much more difficult to raise interest rates or apply a tax screw turn without breaking the consumption and investment, according to Andrew Wilson, who added that the strengthening of the banking regulation could worsen the situation by closing the tap of the credit.

If Europe is particularly vulnerable, it is not both because the most fragile countries weigh heavy: the Greece, the Portugal, the Spain and the Ireland weighs only 20 of the euro area economy. But that's because banks of other countries are potentially exposed to the risk of a restructuring of the debt of these countries. Andrew Wilson sees no monetary tightening of the European Central Bank (ECB) prior to 12 months. And he does not expect the first rounds of screws by the US Federal Reserve (Fed) before early 2011.

Regulatory uncertainties

"It is a true headache for the ECB," noted some analysts, noting that the Central Bank has lost credibility and independence in deciding to buy sovereign bonds in the euro area a few days after having said the contrary. According to them, "neutralization" of these operations operations cannot conceal that there are many "quantitative easing" as banks have almost unlimited access to the ATMs of the Bank.

Andrew Wilson identifies a risk for the euro area: that of regulatory uncertainty, especially since the unilateral intervention of the Germany against certain types of short selling. "The euro area countries need capital markets in the coming years", prevents the specialist. Considers moreover that the weight of the speculators in the turbulence is secondary and that these are currently especially insurance companies or pension funds which are at the shelter and fall markets. "These investors have sought to maximize their yields by placing their cash on the less safe sovereign debt of the zone euro; "they realize today need to review this strategy, which is perfectly legitimate and logical in the functioning of the markets", he explains.

In such a context, Andrew Wilson prefers secure signatures. German bonds are preferred in US Treasury bills. The specialist considers that the the euro 750 billion rescue plan protects against a domino of the Greek debt crisis effect. "It is not yet certain" that it should not be restructured, but Spanish and Portuguese State bonds should avoid this fate. As the British "gilt", they deserve a "neutral" opinion, because the book has already dropped and it is too early, according to him, to the coalition in power in Britain.