THE CLIFFS OF FALL

“O the mind, mind has mountains; cliffs of fall

Frightful, sheer, no-man-fathomed.”

Gerald Manley Hopkins (1844-1889)

• A weak global economic environment

• US 2Q12 GDP revised downwards

• A mixed picture for the US economy, but a positive surprise in September payrolls

• Central banks open-ended stimulus (or promise thereof) continues

• Europe struggles with mounting popular unrest in the face of austerity

• Markets continue to defy gravity

One month after significant action on quantitative easing by the major central banks and less than one month until the US presidential and congressional elections, the markets are once again focusing on the weak global economic fundamentals, the continued risks posed by Europe and the rapidly approaching deadline for the US fiscal cliff, all of which have provided fuel for market volatility.