Hedge Fund Advisor:Fighting and Grinding

You've got to watch Europe now,said Sarah Quinlan,founder and Chief Investment Officer of QAM.The IMF and EU are fighting.There was a joint national strike in Spain and Portugal.I think it's sort of a grind lower.Eventually the car runs out of gas.
I'm loving my sovereign bonds-obviously from the emerging markets and the US.
If they start a more entrepreneurial economy,they could start to grind out of it.The austerity is the wrong move.They'd better do something today.
Treasury Secretary Tim Geithner should stay through February to keep the market calm till we get through the debt ceiling.It's an overall anemic volume world that we're living in.
We are way overstaffed on Wall Street.Fewer partners were made at Goldman Sachs this year.I think it's a fundamental change.
QAM is a hedge fund advisory firm.Founder Sarah Quinlan is active in the 100 women in hedge funds peer advisory group.

Fiscal Reform:Geithner's Global Optimism

In the view of U.S. Treasury Secretary Timothy Geithner,the journey to fiscal responsibility is well underway worldwide.In the U.S.,Mr.Geithner said,the important thing for the economy now is to lock in reforms to bring down the long term deficit.It's not surprising that average people are sceptical of Washington.I'm confident we will start the process.I think it's achievable.There's an emerging consensus on how much we have to do-four trillion in cuts-and the time frame.
The more details you have,the more credible it's gonna be.Faced with enormous challenge,Washington has always come together.You have to do it in a balanced,comprehensive way.There's no way to do this without changing our tax code.Life's about alternatives.We need a balanced,comprehensive package that will add modestly to the burden of the most fortunate Americans.
We have to earn the confidence of investors,but I didn't have to reassure foreign investors when Standard&Poor's downgraded their U.S. credit outlook to negative.We don't know how much is gonna be possible,but we have good prospects of laying down a foundation.
For its part,Europe is doing incredibly difficult reforms.The leaders of Europe have said they will do whatever is necessary to address the sovereign debt issue,and they're making some progress,in Timothy Geithner's estimation.
Before assuming his cabinet post,Mr.Geithner was president of the Federal Reserve Bank of New York,where he played an integral role in dealing with the financial crisis,assisting his predecessor at Treasury,Hank Paulson.Although initially disliked by some in Congress for mistakes he made on his income taxes some years ago,he has developed a decent working relationship with lawmakers over time.

Billionaire Sees Stagflation Ahead

Billionaire Wilbur Ross of W.L.Ross&Company notes that the real problem Greece has is the extent of its debt,which has reached 13.7% of Gross Domestic Product.On the tax side,people in Greece don't pay tax.The government only gets 3-4% of what it is owed.There's not an easy way to pull out of the European Union.The frugal Germans are bearing the price for the sins of the people of the South.A whole lot of things could be reformed,but how do you get it through the legislature?
Estonia has cleaned itself up pretty well.At best,these countries will have stagflation without big government spending;the economy will weaken.They have to start cutting,even though it will be painful and slow.You have over-leveraged states in Europe trying to prop up the over-leveraged consumer.The thing that's dangerous for us is more the question of the Euro versus the dollar.We already had an imbalance of trade with Europe.
Mr.Ross doesn't see the U.S. going back to a recession,though the debt problem will probably cut basis points off its GDP and that of China and others. U.S. Treasury Secretary Timothy Geithner will be meeting European leaders on the way home from China to discuss the debt issue.

High Level Exchanges Begin

The U.S.-China Strategic and Economic Dialogue began at the end of July.The dialogue had been planned during the George W. Bush presidency.It encompasses both economic and political matters.On the economic front,the two countries agreed to continue working for global economic recovery by easing their trade imbalance and revising financial regulations.They will also correct protectionism and climate change,while working to reform the World Bank and International Monetary Fund,so that China's rising status in the global economy is more fairly represented.
For its part,the U.S. reassured China that it has a exit strategy from deficit spending and monetary easing,which China fears may harm its 801.5 billion dollar investment in U.S. Treasury securities.Treasury Secretary Timothy Geithner said the U.S.-China efforts were vital,not only to the well-being of the two nations,but also to the health of the global economy.

Ministers Agree on Framework

The G8 finance ministers,meeting in Lecce,Italy over the weekend,have produced the Lecce Framework,a strategy for obtaining a set of common principles and standards governing the conduct of international business and finance,according to their communique.Their goal is to identify and resolve regulatory problems that contributed to the financial crisis.U.S. Treasury Secretary Timothy Geithner said the U.S. would propose more conservative standards,including several international proposals to help raise global standards of oversight of cross-border financial firms and global derivatives markets.
The G8 ministers,representing the U.S.,France,Italy,Germany,Russia,Canada,the U.K. and Japan,noted recent improvements in global financial markets and economic data,although significant risks remain.They asked the International Monetary Fund to help devise a plan for winding down fiscal and monetary interventions,while agreeing to maintain the programs as needed.