Equities: taking profits

We have been long equities for a very long time. We are now closing these long positions. The motivation is that the Fed will be forced to tighten monetary policy earlier than expected as the low efficiency of the US labour market reduces unemployment rates to levels that are incompatible with monetary policy settings, even at low levels of GDP growth. This is negative for global growth because of wealth effects and excessive leverage in the global corporate sector, sovereigns and emerging markets (particular in Asia.) Asset markets should be similarly vulnerable.

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