So will the Italian bond market. There is massive corporate restructuring going on, as concepts such as corporate governance and shareholder value take hold. The model for continental Europe is Japan. There is a struggle to sustain economic recovery and a bias towards monetary easing, which is good for stocks. But the best risk-reward ratio is in Britain.
Stocks are cheap relative to the bond market.
That's one reason why Britain is poised to take off. Holding elections within the next few months is also positive because markets abhor uncertainty. In Asia, our favorites are the Philippines and Indonesia. In Eastern Europe I like Poland and Hungary. Latin America looks unexciting, but I would give Brazil and Argentina the benefit of the doubt.