“I wonder if it may not be time to look 'over' the fiscal cliff and see what may await us? The cliff itself may end up being fudged, kicked along the road, etc., a la Euroland issues...but then what?

“W ill we then go back to looking at the dire outlook for Euroland , US corporate profits, mining companies...?

“Or will we take courage from the gradual normalisation of the US housing market, and a to-be-hoped-for burst of spending by the new Chinese leadership? (re this last, I note a number of doomsayers emerging who fear any investment splurge can only work in a very short term, as the economy is 'too much out of balance'. Now there's a little conundrum for Eoin to chew over!”

Eoin Treacy's view The leadership transition in China is a significant event, but we do not believe this will be accompanied by a change or reversal in the direction of policy. Politi­cal stability and legitimacy in China depends on delivering continued growth in incomes and in the standard of living. The challenges of unbalanced growth between investment and consumption and unequal wealth distribution have not gone away. The solutions will continue to test the resolve of China's politi­cal elite. Now the transition is done we see policy turning supportive for growth. Stocks look cheap to us, and the stronger renminbi exchange rate also indicates to us greater confidence among domestic Chinese. After a long period of slowing growth, adverse policy and political uncertainty, we now see China turning the corner, and we are bullish.