Janjuah on his current outlook:
"Tactically bearish. 2 to 3 month view. I think we saw the decent run-up we were looking for from mid-November to now. I think it's now time to put the risk up and commodities up, but we're now looking for a reverse or the post-Jackson Hole risk on or inflation trade. 10% I think for now. There's a lot of pitfalls depending on how we navigate those, it could be worse-could be better."
On the big themes driving the course in 2011:
"Right now and there seems to be three themes in everyone's focus. One is Asia going to slow down? If so, when and how? Will it be hard or soft? Does that have global implications? We think it does. We've had a lot of people tell us Asia doesn't matter. That is a surprise and a worry. No. 2, is Europe closer to the endgame in terms of fixing its problems or not? Are we going to need another crisis before we get the solution? Perhaps is Ireland that crisis? Number three, and the thing considered to be the least risky issue in the market is the U.S. recovery. Is it sustainable? Will it deepen and broaden into the domestic economy, which we think it has to if it is going to be sustainable. Or is it a redux of last year where a lot of people were talking about Fed exits and rate hikes by the Fed. A couple of months later, something completely different happened."
"What we're seeing and what makes sense is a reallocation out of emerging markets into developed markets. That makes sense. The other big thing we've seen it is a flow out of fixed income credit into equities. The issue for me is this. If you believe the U.S. economies and western economies are going to kick off a long leg of sustained growth, really the only thing you want to own are U.S. financials and perhaps European financials. The financials have been left behind over the course of 2010. If we're going to have genuine domestic led recoveries in these economies, the financial sector is going to be at the middle of them."
"I think we will have a deeper and harder slowdown in Asia than people think. I think the European situation is closer to the endgame, but I think a crisis might be required to get us over the line. My biggest doubt is on the U.S. recovery. I am going to suggest that this year is going to end up like last year, where in Q2 and Q3 as the year unfolds, the growth story weakens. And much like last year, we are going to be looking for QE3."
On the euro:
"I think it is very clear now for me that the euro has two choices. It will either become the world's next reserve currency or not. I think the resolution of that problem in the periphery--the banking sector, the required recapitalization of the European banking system--if we get that done properly, the euro wins. I am more optimistic today than I was two months ago. I think there is a push towards realizing this is a solvency problem, not a liquidity problem. There is a push to clean up the ECB again. I think there is a realization that fiscal measures and equity will be needed as opposed to just money printing."
Source: Bloomberg Television