Curse of interesting times

We live in interesting times. The Chinese blessing (or curse) seems to be pursuing markets well into 2008. The first quarter looks set to continue its volatile and uneven performance while the US Federal Reserve still appears to have no real plan for stopping the slide of the American economy into, at best, stagnation or at worst, recession.

The European Central Bank and Bank of England have taken a calmer approach to the financial upheaval. Decisions to keep rates on hold clearly put control of inflation as the number one priority for both. The real risk of the return to double-digit inflation is something Europe will do anything to avoid, while the Fed seems rather unconcerned with its worrying high headline inflation figures.

While the hedge fund industry tends to like volatility, this much uncertainty and market turmoil may be a