New York, NY (PressExposure) April 20, 2010 -- "Mann International" clients are being reminded that, despite the more positive economic data emerging from developed nations, the recovery is primarily being driven by unprecedented government spending and borrowing and that, eventually, the "punch bowl" will have to be removed.
"Mann International" strategists suggest that many economists and commentators are becoming over-optimistic about the strength and sustainability of the economic recovery and this is feeding through to investors who are pushing asset prices into bubble territory and re-creating the environment that lead to the financial crisis.
One of the strategists ventured that where the credit crunch was brought on by subprime contamination of ostensibly AAA-rated collateralized debt obligations (CDO) and mortgage-backed securities (MBS), the current risks centered on the cheap money that governments and their central banks have injected into their economies feeding into equities and other assets. http://www.investopedia.com/terms/m/mbs.asp
"Mann International" believes that markets will correct sharply once it becomes apparent that the central banks are beginning to rein in stimulus although they do not rule out the very real possibility that some will prefer to err on the side of caution rather than risk killing off the recovery and tipping into a double-dip recession. http://www.investopedia.com/terms/d/doublediprecession.asp