Global economic outlook discussed at G.A.M.E. IV Forum in New York
March 20, 2014 - A high-level panel of economists and investment experts offered a very positive view of the world's economy during the first day of Quinnipiac's annual Global Asset Management Education (G.A.M.E.) IV Forum at the Sheraton Times Square Hotel in Manhattan.
But the "Global Economy" panel's sole bear, Richard Yamarone, senior economist at Bloomberg Brief, pointed to a weak middle class, whose declining buying power and tenuous employment situation ripples through the economy. "We're seeing job creation, but not in the categories we like to see," he said. "We're on thin ice." He also cited the rise in unsustainable student loan debt, which he said could be "a subprime crisis waiting to happen."
The other participants were quite positive, especially about the growing power of emerging markets, though there was some caveats about Europe, China and the spending damper caused by a severe winter in the U.S. "My long-term outlook is still up," said Bob Doll, chief equity strategist and senior portfolio manager at Nuveen Asset Management. "There are international issues that cloud the situation," he said. "But the economy is learning to walk again, and eventually run."
John Silvia, managing director and chief economist at Wells Fargo Securities, said that smart investors need to think globally because corporate profits are increasingly being made abroad. "You can't look at investments without looking at foreign investments," he said.
Douglas Coté, chief market strategist and senior portfolio manager at ING U.S. Investment Management, said that the current mood is positive but "not euphoric." Despite the recovery, he said, "There is still $7 trillion in cash on the sideline." He attributed that problem to "pervasive fear," sometimes spurred by "one-off" events like the Ukraine crisis. But Coté said "it's safe to be out there," and he pointed to a doubling of the global economy, from $35 trillion in 2003 to $73 trillion in 2013. He urged investors "to be where everyone else isn't, which is in the emerging global markets."
Even Yamarone, the least optimistic of the panel members, admitted that the latest macroeconomic anecdotes he collects from CEOs and CFOs in the quarterly Orange Book are "upbeat and optimistic."
Student queries spurred an interesting discussion of global energy issues. Coté noted that the U.S. has become "the largest energy producer in the world, ahead of Russia and Saudi Arabia." A top priority, he said, should be "opening up the export of natural gas to Europe and Asia," which could help turn around the U.S. trade deficit by the end of 2015.
The first day of the investment conference also included panels on "The Fed and the Washington Perspective," "Alternative Assets vs. Equities," "Corporate Governance" and "Global Markets."
About G.A.M.E. IV Forum
The forum, founded by David Sauer, a finance professor in the School of Business, attracted more than 1,000 student participants from 131 colleges and 21 countries to hear 113 speakers over two and a half days. G.A.M.E. is partially organized by Quinnipiac students, who also take part in Q&A sessions with the speakers.