Never were the liquidity was also abundant

The financial sphere lives a new golden age. Never were the liquidity was also abundant. After a year 2005 which had marked a return to a certain opulence, the vintage 2006 has beaten all records. Also on the stock market to the plan of the mergers and acquisitions, the effects of this abundance of financial resources are palpable throughout the world.

The reasons The financial industry benefits from levels of interest rates in the long term that remain reasonable despite tightening monetary policy conducted by the major central banks since 2003. Nominal rates are still relatively low, oscillating 3.70 at 10 years in Europe and 4.60 over the same period in the United States. Which allows investors to leverage their capacity for action by playing in full leverage.

This cheap money contributes to fuel already strong global growth, largely driven by the dynamism of the emerging countries. Demand for raw materials and energy products generated by the force of the Chinese economy provides a welcome manne at the time where the U.S. growth shows signs of slowdown.

Reasonable valuations

The fears expressed by stock markets when they realized in the spring that the American locomotive huffed were quickly dissipated by the good news from the emerging countries. Companies find ways to sustain the growth of their incomes and comfortable margin levels. The progression of corporate profits is supported, even if it tends to be influence. Financial analysts still anticipate an increase of 8 of the profits in 2007 following growth in double digits in previous years.

In these circumstances, recovery of the stock levels remain reasonable, although they have for most found their highest historical in the last quarter, such as the Dow Jones which touch the points 12.500. In the unanimous opinion of the investors, the shares offer today attractive yields compared with those of bond investments or real estate.

On this particularly fertile soil, it is the whole of the financial industry that prosperous. The fund managers, whether they are specialists of the non-coté, the collective or "hedge funds" (funds for arbitration), raised huge sums.

The only sector of the investment in the non-coté brought together 300 billion in fresh money in the past twelve months. Similarly "hedge funds", despite the setbacks of the American Amaranth this summer on the gas market, have continued their momentum in 2005.

Mergers-acquisitions boom

The funds have become major players in the field of mergers & acquisitions. They have fuelled an unbridled activity that has generated more than 3.800 billion dollars last year, 30 more than in 2005 and even more than in 2000, year which held the record so far. However, the fundamentals of this overactivity seem solid. Almost half of the operations is today conducted in cash. And the premiums offered by the purchasers are not sold. They are barely higher than 20 on average according to McKinsey, while it were around 30 in the previous wave of reconciliations at the turn of the 2000s.

At the time, banks largely derive their PIN of the game. Those who operate on the activities of financing and investment, in mind. Golman Sachs profits in 2006 as tutoyé $ 10 billion. But also private bank and the collective actors who have never collected so much money in the past year. And even the Bank of detail that will have benefited from the appetite of individuals for financial products in General and in particular credit. Result: surplus own funds of major European institutions will exceed 100 billion euros, while no harbinger of rebound in risk emerges. Bankers can still hope to improve in 2007 already astronomical bonus amounts. A Wall Street, they shared some 40 billion dollars, nearly two times more than what they had earned during the peak of 2000.