Judging by the sentiment among participants at the "Globes" 2013 Israel Business Conference, 2014 will be a good year for the global economy and markets. A poll presented to the conference today found that 70% of the respondents believe that global economic performance will be better in 2014 than in 2013. The poll provided the opening shot in the session on the global economy in 2014. The session participants were PIMCO global strategic Advisor Prof. Richard Clarida, former Deutsche Bank CEO Dr. Josef Ackermann, China Investment Corporation chairman Jin Liqun,and "The Financial Times" associate editor and chief foreign affairs commentator Gideon Rachman.
"I think that the global economy will improve, despite the economic clouds, especially with regard to Europe," said Ackermann.
Clarida agreed, saying, "I think that I am more optimistic. Europe will be in a state of recovery, and this could be the best year for the US economy in years."
Jin was also optimistic, saying, "I am on the positive side. The US is getting along, China will improve, and European countries are improving."
Rachman somewhat spoiled the party, saying, "I have some less positive points, especially on diplomatic and political matters. There are political tensions between Asian countries."
Moderator CNN host Richard Quest asked the participants whether the markets were right about the economic direction, in view of the rally in stocks. Ackermann cautioned against tapering purchases of T-Bills in the US, saying, "The tapering of purchases will have a major effect on the markets."
Quest: Will this shake the markets?
Ackermann: "Yes. The question is how big the tapering will be. Smart investors are arguing about this."
Rachman: "It is hard to think what the Fed's best media policy will be. The message should consider the fact that the markets are currently addicted to cheap money."
Clarida: "I think that it will be as Ackerman says. I think that the Fed will begin the tapering, and then will assess the market response. We're sailing in unknown waters."
Jin: "It's impossible to rely on the QE3 forever. Give the markets time, and see the reaction."
Clarida believed that the Fed will begin tapering purchases of T-Bills this month, or in early 2014 at the latest.
Asked about reforms in China, which the West is struggling to understand, Jin said, "The Chinese public wants the reform. It will take longer for people outside, and China should communicate better with the world. China works with the international community to integrate into the global economy. China is not worried, so why should you be worried? The reform is good for the country for the ten or twenty years."
Published by Globes [online], Israel business news - www.globes-online.com - on December 8, 2013
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