We may well look back on 2011 as a year that forever changed the economic and political landscape of the world. At the very least, it will be a case study year for students of both economics and politics long into the future. For this year has proven no less eventful than 2008, with a bombardment of sensationalist headlines causing unprecedented volatility across the financial markets. Indeed, during one tumultuous week in August, the S&P 500 Index gyrated by more than 4% on four consecutive trading days - movements of such magnitude have never been seen before. We witnessed several sovereign states in the Eurozone being forced to count the cost of many years of living the high life through soaring interest rates and further bailouts for Greece and Portugal. With tough austerity measures being thrust upon the heavily indebted nations we saw a change of government in Greece, Italy and Spain as financial markets flexed their power over political leadership. However, the Eurozone debt crisis was far from the only macro-economic event clouding the decision making process of investors. The United States suffered the embarrassment of being stripped of its AAA credit rating, whilst a knife was taken to growth forecasts across the globe. With this deluge of macro headlines dominating the fundamentals, correlations between asset classes and intra-asset class rose sharply. It was a year where valuations clearly counted for very little and certain markets were driven to extreme levels.

David Fuller's view I commend this report to subscribers.