Erik: And coming back to monetary policy we're being told now to expect 3 or 4 rate hikes in 2017. Of course, I think a lot of people forget that if you go back a year we were told this time last year to expect that many rate hikes in 2016 and they didn't happen. So, what do you see in terms of Fed hikes, FOMC policy in general and particularly how FOMC policy will interact with Donald Trump's agenda in the coming year?
Dave: Well there's no question that the Fed got scared off last year and you know a lot of that was the early year jitters in emerging markets and all the concerns about China's potential big devaluation and then we went from that to BREXIT and all the uncertainties enveloped in the US election and we can't deny the fact that an average GDP growth in the United States last year was 1.6%, tied for the weakest year of the cycle and down to full percent this point in terms of growth to where we were in 2015. All that said the Fed has told us once again and it could be the case of the boy who cried wolf, just remember that at the end of the story the wolf did show up. That, I think, is the case with the Fed this year. Fool me once shame on you, fool me twice shame on me. And my sense is that there's a little bit of - more so they didn't take out our least less rate one or two more times last year with the benefit of twenty/twenty hindsight. So, I sense is that I think we should still take them at their word. I think it's what makes this year maybe different than the other years is that instead of the Fed doing less, the Fed could end up doing more. I mean what's astonishing in terms of how the market is really taking on the Fed and looking at the whites of the eyes is that even after the Central Bank has told us that if we're gonna raise rate minimally 3 times this year, before Trump gets anything passed up the Fed’s GDP growth forecast, the Fed has told us they're gonna raise rate at least 3 times, the markets really priced for 2. So, if you're gonna ask me among all the risk for this year it certainly has a lot of political risk in Europe that is for sure. I think we're still concerned about the extent towards excessive credit has fuelled this 6.5% growth rate that we're seeing in China. There's other concerns as well. But the Fed reacting and over reacting to what Donald Trump does I think and again a serious marker risk. It's not evident to the eye right now but I think it could be as you move to the balance of the year.
Erik: Let's pick up on your comments about the risk in the European Union. I just saw a piece this morning that supposedly Trump's new ambassador is already saying short the euro because he thinks there might not be a European Union to negotiate with a year from now. Its unprecedented in my opinion to hear such strong comments from an incoming government official, do you think it's that dire? Do you think that the EU is at risk of breaking up? And what would be the knock-on effects of that in terms of the US dollar and everything else?
Dave: Right. Well it's a, I wouldn't say that these fringe right-wing parties getting in, the real hardcore anti-EU coming into power in the Netherlands and France or in Germany, I wouldn't make that a base case scenario. But that doesn't really matter in the sense that how the markets operate is on expected values and on probabilities. And this is certainly a tail risk of governments in core countries following in Britain's footsteps. So, I think that it's not a base case scenario for me, but the odds of it happening is certainly aren't trivial and what's more important is that even if the breakup of the EU and say 10, 15 or even 20 percent odds, it's then what are the market reaction to that? And you have to embed not just the probabilities but also what's the likely outcome in global currency, bond markets, commodities and equities. So, we have to work on all that. The odds are low but they're not trivial and I think that it would be very, very severe in terms of what it would mean for the world. It's one thing to have the UK which is always sort of had to step in and step out, they weren't part of the euro. But it’s another thing to have something that for all its flaws and its warts and its scars and the bureaucracy involve with the EU and maybe the added cost, the reality is that what it produced was a peaceful Europe. I mean I think we're living in a period of time now over the past 6 decades really, it's an 8 percent chance of this happening that Europe could go this long without a war. And I think that that is really what people miss out on when they complain about all the Davos liberals and the establishment, so on and so forth, miss out on what the true benefit for the global economy and society. When you take a look at wars historically they're always coming out of Europe and what the EU did was provide that cohesiveness. So, that's the principal risk I think from a geopolitical standpoint and I think it's something that it's hard to handicap the odds but after what happened last year between how the British voted and how the Americans voted and even how the Italians voted we're in an uncharted territory here and there's a lot of different franchise and disenchanted parts of population everywhere that want to see political change. You can have a political change in Canada where you actually vote in an establishment party but one that had been in the wilderness for a decade but reinvented itself and interestingly enough here we have the liberals in Ottawa led by Justin Trudeau, one of the few governments around that actually are still carrying around the free trade banner. But we've already seen what happened last year. I don't wanna mention any state that I wanna super impose that on what's gonna happen politically this year but the EU certainly, that is a very big political tail risk and one that shouldn't be dismissed out of hand.