Low interest rates catalyst for the economic tailwind

On 6 March, the market realised if Citigroup could earn its way out of the capital hole created by caustic debt holdings, less troubled banks could also.

Applying a multiplier to that capital meant cash-starved firms would have the funds necessary to restart their growth engines. Of course, that was not the whole story. The other major catalyst to the dramatic equity market turnarounds was the Chinese stimulus plan. When scaled for GDP it was larger than the US plan and more directed toward infrastructure spending. The stimulus plan, combined with China’s generously accommodative lending environment, fuelled real growth in demand for a wide spectrum of commodities. Until the end of Q3, the most important decision any manager could make...