I first looked for an export led recovery in the US in June in my article Investment Strategy: The New Macro. It was my view at the time that the US economy had been in recession for the last 12 months, despite a 2 year long liquidity and emerging market driven bull market in the

Yesterday the Fed and 5 other major central banks announced measures to shore up liquidity in the global banking system.

Is the European banking system solvent? How many European banks are insolvent? If one marks to market the value of all the assets of each European bank, how many would remain solvent?

Banks trade on confidence and reputation, not financial strength. Put aside for the moment the complicated and confusing Basel rules and let’s apply some common sense. Put aside definitions of risk weighted assets and Tier 1 or Tier 2 capital. Look at a bank as a business.

The beginnings of a proper recovery are emerging in the US driven by exports and the repatriation of manufacturing.