2013: A Post-Crisis Year?

Some signs in the economy and market are indicating that 2013 may be the first “post-crisis” year

J.P. Morgan Asset Management 14 December, 2012 | 6:00AM
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This article is part of Morningstar's "Perspectives" series, which is a series of articles written by third-party contributors.

Could 2013 be the first “post-crisis” year for markets? Some signs are very encouraging. Yields on peripheral market debt have fallen sharply following September’s announcement of the Outright Monetary Transactions (OMT) programme by ECB President Mario Draghi. After numerous extreme spikes over the last couple years, the S&P 500 volatility index (VIX) is now below its long-run average. Credit default swaps on European banks have declined to July 2011 levels. The latest (though not last) Greek aid tranche has been distributed.

The risk of a chaotic break-up of the eurozone has clearly receded and not only because of more forceful intervention by eurozone leaders (however tardy). The economic imbalances that precipitated the crisis are also correcting. Italy and Spain are running trade surpluses with the eurozone. Greece’s primary budget (before making interest payments) is in surplus year-to-date.

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About Author

J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.

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