New Investor Survey Provides Additional Evidence of Regime Uncertainty

Writing for CNBC’s “Behind the Money,” John Melloy describes the findings of a recent survey of investors:

Institutional investors fear a government policy mistake far more than inflation, terrorism, a housing double dip, a weak dollar, poor earnings or any other potential risk to the economy, according to a survey of 100 mutual fund, hedge fund and pension fund managers by Citigroup Global Markets.

“Government Policy Missteps” garnered more than a third of the participants’ votes as their biggest fears in the quarterly survey, ahead of the more than 15 percent who cited “Protectionism,” which is also strongly-tied to the actions of the Administration and Congress.

Last week, I had occasion to speak to several wealthy investors, each of whom attested to the apprehensions associated with regime uncertainty. Most of them seem convinced that the Fed is in the process of destroying the dollar, but none of them has a firm expectation about what will replace it as an international reserve currency. Many see no good prospects for domestic investment at present, except in certain commodities. Needless to say, perhaps, such an outlook by investors does not portend a robust recovery from the current recession, if indeed it is compatible with any recovery at all.

We live, as the saying goes, in interesting times—indeed, much too interesting.