Alumni and Friends of the LSE
in the United States

LA Chapter upcoming events

Dear Reader,

Spring has sprung and with it have come acceptances in to the LSE for residents of the LA area! We have been receiving requests from newly admitted students for alumni perspectives on studying in particular departments, so in advance of our annual Bon Voyage party in August, we will be organizing our traditional pub night with a focus on newly admitted students to the LSE at the Cat & Fiddle in Hollywood on Thursday, May 15.

We encourage our usual core constituency of alumni to attend and bring with them their warm and welcoming spirits, but of course also welcome alumni who may not have attended a chapter event as yet, inviting them to meet fellow LA-area alumni and perhaps newly admitted students who have questions about life in Houghton Street. Additionally, newly admitted students are warmly welcomed, so come and meet local alumni and bring with you your queries about life in London.

PUB NIGHT!

Thursday, May 15 Newly admitted students to LSE welcome!

Time: 7 PM

Location: The Cat & Fiddle, 6530 Sunset Blvd, Hollywood

Come enjoy a pint and some pub grup on the Cat & Fiddle's famous patio and catch up with your friends and fellow alumni!

OTHER CHAPTER NEWS:

The Ivy Plus Society

LSE is the newest member of The Ivy Plus Society, a networking organization of alumni of prestigious universities. Social networking events are held monthly at different hot spots around town, giving alumni a chance to meet other alumni of British universities in town, as well as alumni from top academic institutions across the country, which many of our membership have attended as well. Please join The Ivy Plus Society for Spring Fever at SkyBar on Tuesday, April 22 at 7 PM and stay tuned for announcements of upcoming events with this group.

BritWeek 2008

LSE alumni are warmly welcomed to join the festivities in honor of BritWeek 2008, which celebrates the cultural and business connections between Los Angeles and Britain. Events begin on April 25 with the goal of generating publicity and broadening awareness of the importance of this relationship, in terms of ideas and investments in both directions; to highlight the fact that Britain is the largest investor in Southern California as well as a profitable investment destination for Californian companies; and emphasize British influences in film, TV, music, fashion and luxury lifestyle that are prevalent in Los Angeles life.

BritWeek's kickoff event is hosted by the British American Business Council (BABC) which whom the LA Chapter is developing a strong relationship and is in ongoing discussions about joint programming and co-hosting events. We hope to see you at the breakfast with Lord Levene, Chairman of Lloyds of London, at the Regency Club on Friday, April 25th at 8 AM.

UPCOMING EVENTS:

June 14: Wine Tasting at Silverlake Wine at 6 PM

Discover your inner oeneophile! Save the date for a wine tasting at boutique wine shop Silverlake Wine for a chance to mingle with your fellow alumni while tasting three of Silverlake Wine's unique selections and enjoying a selection of gourmet cheeses from the Silverlake Cheese Shop. Please RSVP by June 12 so we can give Silverlake Wine a headcount of attendees. Attendance is limited to 24!

Click here to purchase tickets and RSVP.

NEWS FROM THE AFLSE:

UCLA student wins AFLSE scholarship for MSc in Politics and Communication at the LSE

Congratulations to Brett Noble, a senior at UCLA majoring in political science and communications. A senior news columnist at the Daily Bruin, Brett plans to use his LSE education to further his work in reporting on political injustices.

ECONOMIC OUTLOOK: APRIL 2008

THE GLOBAL CREDIT CRISIS SHOWS LITTLE SIGN OF ENDING IN SPITE OF MASSIVE FISCAL AND MONETARY STIMULUS.

1) Conditions in the credit markets remain unstable. The latest measures taken by central banks are encouraging, but it is too early to know for sure whether or not they will work.

2) The extent of leveraged debt was beyond all estimates. It will take longer than expected to unwind bad debt and restore stability to financial markets. The decline in housing continues, adding fuel to the debt crisis. The housing market will need to stabilize to bring an end to the unwinding of debt.

3) The US economy is likely in a recession, although it is too early to know for sure. If a recession is avoided there will nevertheless be a significant slowdown in the domestic economy. Overseas economies remain relatively strong, providing a boost to US exports. The weak dollar will provide a stimulus to export growth.

4) Manufacturing and export led growth will not be enough to compensate for slow consumer demand and weaker corporate investment. It will take a while for the US economy to turn, but a stronger second half of 2008 is likely.

5) There is considerable concern over a rise in inflation, and the specter of stagflation, the concurrence of inflation and a weak economy. While core inflation rates are somewhat higher, inflation is not a problem at this time. The weak economy, the credit crisis, weak housing, weak wage growth and globalization of the economy are not the ingredients of inflation. The greater risk of inflation lies ahead once the economy recovers and assuming wage pressures rise in a tight labor market.

GLOBAL STOCKS ARE IN A BEAR MARKET, HAVING GIVEN UP MOST OF LAST YEAR’S GAINS.

1) While markets are above the January lows it is too early to say whether those levels will hold. As always opinions are widely divided.

2) The “bulls” point to decent valuations and the fact that the Fed has drastically cut interest rates and added reserves to the banking system in an effort to stimulate the economy. The arrangement of special lending facilities, while essentially a bailout of distressed financial institutions, is a powerful measure designed to rescue the financial system.

3) According to the “bears” we have just seen the tip of the iceberg. The credit problem is much more widespread as evidenced by the sudden announcement of liquidity problems at Bear Stearns. The bears believe there is more bad debt in the system including commercial loans, plus securitized credit card and auto debt.

4) The timing of the stock market “bottom” will depend to a large extent on the depth and duration of the economic contraction. Typically the stock market starts to recover about half way through a recession. By the time the recession is over the market is already substantially higher. Assuming the US economy recovers in the second half of 2008, then the stock market should begin to recover toward the end of the second quarter. If the recession is larger and deeper then all bets are off. Our analysis leans toward the bullish case based on effective central banks monetary policy and fiscal stimulus injected into the economy.

5) Furthermore we have already experienced a stock market down turn of around 16% from the October 2007 highs. An average bear market is around 20% which puts us near the low. The average recovery from a bear market is over 20% in the first year.

6) A lot will depend on whether or not there is much more bad debt hidden in the financial system, in the form of derivatives or other leveraged products. Unfortunately many financial institutions simply did not know the extent of the bad debt on their books.

7) The aftermath of this financial crisis as is usually the case, will be greater regulations and disclosure. This is not necessarily a bad thing, but will be a damper on financial innovation and growth in the financial sector.

RECOMMENDATIONS: APRIL 2008

U.S. EQUITIES

While it may be too early to overweight equities, the time is coming when an equity overweight may be called for. A good way to add equities is through the rebalancing of the asset allocation target. The combination of aggressive monetary and fiscal policy will eventually be effective.

U.S. FIXED INCOME

We continue to recommend short to intermediate duration for fixed income securities. Longer maturities seem to be overbought and represent poor value. The credit crisis has precipitated a flight to quality pushing fixed income yields down. As the credit crisis abates yields will move back up as investors unwind quality spreads.

There is good value in municipal bonds. Forced liquidation and the uncertainty associated with bond insurers and rating agencies has pushed yields up. Tax free yields are actually higher than taxable yields for comparable securities. This is unusual and will not last.

OVERSEAS STOCKS and BONDS

Overseas diversification is recommended as a means to access overseas growth as well as provide a hedge against the weaker US dollar. Overseas markets will rebound substantially once the global credit crisis abates.

Please visit www.aflse.org for updated information about the LA Chapter and its events.

Know someone who went to LSE? Please forward them this newsletter, email losangeles@aflse.org or direct them to www.aflse.org.

Thank you for your support of the AFLSE!

	Los Angeles: Spring Fever at SkyBar Tuesday, 04/22/08 at 10:00pm Join the Ivy Plus Society, a networking group of graduates of Ivy League and prestigious universities including Oxford and Cambridge, at SkyBar.
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	Los Angeles: Breakfast with Lord Levene, Chairman, Lloyds of London Friday, 04/25/08 at 11:00am The British-American Business Council invites the AFLSE LA Chapter to participate in its BritWeek Celebrations at a breakfast with Lord Peter Keith Levene, Chairman of Lloyds of London and former Lord Mayor of London from 1998 to 1999.
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	Los Angeles: BritWeek 2008 Saturday, 04/26/08 at 3:00pm BritWeek 2008 will be from April 26 through May 31 this year, celebrating cultural and business connections between Britain and Los Angeles with events round town. LSE alumni and friends are warmly welcomed!
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	Los Angeles: Pub Night at the Cat and Fiddle Thursday, 05/15/08 at 10:00pm Pub night - newly admitted students to the LSE warmly welcomed! LSE alumni and friends are always welcome.
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	AFLSE Los Angeles: Wine Tasting at Silverlake Wine Saturday, 06/14/08 at 9:00pm Please join LSE alumni and friends, plus alumni from MIT, at a wine tasting.
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	Brett Noble (2008)
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