Biggest Growth Story? Outside the US

The gridlock in US Congress, its reliance on last-minute, short-term fixes for well-documented problems, is reducing confidence, threatening credit ratings and low interest rates for borrowers, worrying investors and decreasing tax revenues. So far, opposing parties in Congress refuse to compromise on substantial reform of the US tax code or costly entitlement programs, especially costly health care. Layers of short-term fixes pushed by special interests have only added complications and uncertainty. Investors are flummoxed. In a climate of “policy chaos,” investment strategist Russ Koesterich suggests that investors avoid assets heavily reliant on American consumer spending and to focus on larger firms with a global reach. He suggests that investors are paying a high premium for an illusion of safety on US Treasuries and equities. Congress seems strangely determined to avoid compromise and reforms, as if it wants the US economy to fail. – YaleGlobal

Biggest Growth Story? Outside the US

With bad news priced in to risk assets, havens like the US look expensive
Russ Koesterich
Monday, January 21, 2013

Russ Koesterich is chief investment strategist at BlackRock.

Copyright The Financial Times Limited 2013.

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