Independent Strategy

Trains and destinations

This paper discusses the fallout from a scenario called “stasis”. It would lead us to change many of our portfolio convictions. Stasis has a rising probability, but still only 30% over a 12-month time horizon. Outright global recession is a 15% probability and our core scenario 55%. Our conviction remains that the US economy will continue to be the strongest of the majors globally (which is not saying much) and the divergence of monetary policies will resume and set the path of currencies. However, this could take time and for the next few months it is quite likely that the market believes in stasis and many of our positions will continue to hurt.

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