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Global Finance Conference Participants Predict That Credit Squeeze Will Have Most Impact on U.K. and U.S. Economies

Tougher times ahead for equities, survey says

 

Vancouver, B.C., and Charlottesville, Va., May 2, 2008 − Most CEOs, CIOs, portfolio managers, and analysts attending the global finance conference hosted by CFA Institute in Vancouver, Canada, expect that the U.S. and U.K will be affected by the global credit crisis for at least 12 months, with more than a third expecting the U.S. recovery will take longer than 18 months. 

This was in contrast to China, India, Russia, and Brazil, where expectations were for a 6-12 month recovery. Most attendees surveyed expect that Canada and Hong Kong will take 8-12 months to recover.

CFA Institute is the global association for investment professionals. 

An advance poll of attendees to the 61^st CFA Institute annual conference predicted that China, India, Russia, and Brazil will overcome the effects of the credit squeeze in a year or less. 426 attendees responded to the survey, generating a 40.3 percent global response rate. (See the full survey results. (PDF))

[Note to media: credentialed journalists may register now for one of a limited number of press passes by e-mailing pr@cfainstitute.org. If you cannot attend the conference, CFA Institute strongly encourages you to request a pre-event interview with a speaker at this time. Please contact CFA Institute to ensure a speaker’s availability.]

Tough times ahead for equities?

The poll also forecasts a difficult environment ahead for the equities market. Most survey respondents predicted that, over the next 10 years, the risk premium for equities over T-bills will be between two and six percent.  

Q: What are your expectations for the large-cap world equity risk premium over T-bills for the next 10 years? (Each Respondent could choose only one option.)

The future of the U.S. dollar and sovereign wealth funds

Attendees voiced their opinion on whether the U.S. dollar will cease to be the world’s reserve currency within a 10 year period: 52 percent said no while 42 percent said yes. When asked the same question within a two year period, seven percent said yes. Noting the influence of sovereign wealth funds, 77 percent said that they are a critical source of liquidity for global capital markets and 38 percent said they are a threat to economic autonomy. 

Q: Do you expect the U.S. dollar will cease to be the world's reserve currency?

(Each respondent could choose only one option:)

Q. Do you view the increasing influence of sovereign wealth funds as: (Each respondent could choose only one option:)

 

Tom Robinson, CFA, head of educational content at CFA Institute, said this year’s conference − taking place from May 11 to May 14 − has attracted nearly 40 of the world’s leading experts to speak on every aspect of the global economy including trends and issues in asset and risk allocation, investor behavior, the credit/liquidity crisis, the economic and political effects of globalization, and the future of the dollar and other currencies.

“Our annual conference will bring together more than 1,800 investment professionals from 70 countries. The majority of our attendees (66 percent) have more than 11 years of investment experience and nearly one third of attendees work for companies that have more than $50 billion in assets under management,” said Robinson. “We expect the meeting of minds at this conference to produce sharp insights into where the world’s economies are going, and how investors are planning to navigate the shoals ahead as we enter what promises to be a difficult year or two for the Canadian and U.S. economies.”

Speakers this year include:

• Nassim Nicholas Taleb, author of The Black Swan − “The Impact of the Highly Improbable: Randomness and Black Swan Blindness”
• Steven D. Levitt, author of Freakonomics
• Jeffrey D. Sachs, director of The Earth Institute at Columbia University − “Common Wealth: Economics for a Crowded Planet”
• Jason Zweig, investing columnist at Money Magazine − “The Neuroeconomics of Surprise: How the Investing Brain Handles the Unexpected”
• Robert A. Mundell, professor of economics at Columbia University and a 1999 Nobel Laureate − “Is Exchange Rate Instability a Threat to Prosperity?”
• Janet L. Yellen, president and CEO of the Federal Reserve Bank of San Francisco − “Economic Prospects for the U.S. Economy from a Monetary Policymaker's Perspective”
• David R. Beatty, CFA, managing director of the Canadian Coalition for Good Governance − “Does Governance Matter to Long-Term Investment Performance?”
• Burton G. Malkiel, Chemical Bank Chairman's Professor of Economics at Princeton University − “Investment Strategies to Exploit the Growth of China”

The CFA Institute annual conference provides an unparalleled look at the trends and investment issues critical to success in today’s global marketplace. 

Renowned speakers cover a range of topics including asset and risk allocation strategies, practical implications of behavioral finance, opportunities following the credit/liquidity crisis, economic and political effects of globalization, investment strategies to exploit the growth of China, hedge fund alphas and betas, consequences of “black swans,” and the future of the dollar and other currencies.

CFA Institute
CFA Institute is the global association for investment professionals.  It administers the Chartered Financial Analyst^® (CFA^®) and Certificate in Investment Performance Measurement (CIPM) curriculum and exam programs worldwide; publishes research; conducts professional development programs; and sets voluntary, ethics-based professional and performance-reporting standards for the investment industry. CFA Institute has more than 95,000 members, who include the world’s 82,000 CFA charterholders, in 133 countries and territories, as well as 135 affiliated professional societies in 56 countries and territories. More information may be found at www.cfainstitute.org. (Bloomberg users can find CFA Institute at 497458Z).