The uncertainty is set to last

- "Since the end of 2009, the financial markets have been characterised by great volatility and a rise in risk premia, sure signs of highly significant uncertainty among investors."
- "This uncertainty is definitely set to last, since it has causes that are themselves longlasting:
• difficulty in ascertaining what the outcome of the sovereign debt crisis in the euro zone will be: stabilisation of public debt ratios and possibility for countries to finance themselves again normally, or a divergent dynamics and eventually a default? We will have to wait until 2012 or 2013 to have a clear view;
• uncertainty about the banks’ real situation, due to additional real estate losses (Spain, United States) and the massive holding of sovereign debts in Europe. We will have to wait for the outcome of the sovereign debt crisis, i.e. 2012 to (possibly) be reassured;
• continued recovery or dip in the United States? The latest figures are downbeat, but we will have to until the end of 2010 and 2011 to gain a better understanding;
• uncertainty about the effects of the restrictive fiscal policies in European growth, and hence the results and the financial situation of companies; will a decline in the savings rate offset this? Fiscal deficits must be drastically reduced from 2011 to 2013."
- "We can therefore expect continued high volatility in the financial markets for several years."
Natixis Flash Economics 355 20100709

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