Merrill Lynch this morning presented their forecasts for 2011: Asia will continue to usurp Europe’s position. Freddy Barker reports
IT TAKES COURAGE for an Irishman to stand up and tell the world how to manage money at the moment. But this morning, Bill O’Neill, CIO of Merrill Lynch Wealth Management EMEA, did just that.
Addressing a seminar entitled ‘The Year Ahead’, he tackled the key question facing HNWs: if cash’s real return is -4% and bonds yield less than equities, is it time to put risk back on the table?
O’Neill’s audience may have been shivering from the Arctic temperatures outside, but they were soon warmed by his sizzling predictions. In 2011, global growth will be 4%. The driver will be the emerging markets – rising at 6%, relative to 2% in the developed world. ‘The defining theme of our age,’ the CIO announced, ‘will be the emergence of Asia, and the gap that has opened up between developed and developing market growth.’
But is he right to be so bullish? Is Merrill simply playing up to its equity-skew?
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Take the topic du jour, Europe, for example. O’Neill said that ‘peripheral problems will persist’ and that ‘dysfunctional Euro debt and a currency collapse’ will be key downside risks. I am inclined to agree. On the surface we are told that the EU is an alliance of 27 cou