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10 Aug 2011

Nordic hedge fund managers on the U.S. downgrade



Here’s a excerpt from an article we did with some top Nordic hedge fund managers, asking them to comment on Standard & Poor’s downgrade of U.S. government bonds from AAA to AA+.
André Havas, Head of Investor Relations Optimized Portfolio Management Stockholm AB: “The world has not recovered fully from the financial crisis that started in 2007. Many of the risks that existed in the various markets are beginning to materialize, the consequences are apparent.
“What began with a banking crisis has now rubbed off on to individual countries. Both the credit crisis and the subsequent state debt crisis is by no means a new phenomenon. PIGS countries’ high budget deficits and high debt, combined with a disconnected economic credit expansion, has been under discussion since the mid 1990′s.”
Daniel Broby, Chief Investment Officer at Silk Invest Ltd: “Sadly, the downgrading of the US sovereign credit rating should have taken no-one by surprise, other than the Congressional Budget Office and a few wrong footed politicians. Whether net public debt is 79% or 81% by 2015 is neither here nor there. It is too much and it is fiscally irresponsible not to have a long term plan to bring it under control.
“The recent debt ceiling spat took saw politicians bring the US to the brink of a selective default on a technicality. That is not what one expects from a risk free rate. The US no longer deserves a AAA rating. In that respect, I note that the AA+ rating is still on negative watch.”
The full article is available at: Nordiska Hedgefondforvaltare Kommenterar
Most hedge fund managers chose not to respond.

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