October 2011 Issue: Key Points

In this issue, we review three key analyses that were released by the IMF last month: the Fiscal Monitor, Global Financial Stability Report, and World Economic Outlook. Taken together, they paint a relatively bleak picture of a world economy poised on the cusp of a dangerous regime shift. We find nothing in these reports that contradicts our long-held view that financial markets are heading into a prolonged period of very rough sailing. To be sure, there always grounds for hope, and plans for escaping the current downward trend, and we review two more of them this month. However, whether it is the IMF's or other analyses, relatively hopeful scenarios for the next few years always include an assumption that China will be willing and able to reorient its economy to generate a much higher level of private consumption demand. That great uncertainty will be our focus in our November issue.

| Investor Herding Risk Analysis: Through September 30, 2011 | This Month's Letters to the Editor: Reponse to Criticism of ETFs and Rhode Island - The Canary in the Coal Mine | The IMF's Gloomy Outlook | Global Asset Class Valuation Updates Detail through September 30, 2011 | October 2011 Issue: Key Points | Table: Fundamental Asset Class Valuation and Recent Return Momentum | Table: Market Implied Regime Expectations and Three Year Return Forecast | Global Asset Class Returns | Uncorrelated Alpha Strategies Detail | Overview of Our Valuation Methodology |