The underlying operating environment for companies is likely to remain very difficult over the next six-to-nine months -- especially in Europe -- so we would definitely sell into any relief rally in the event of a benign resolution to the Iraq question.

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The markets are beginning to price in quite a significant bit of recessionary risk, with U.S. bond yields down to 40 year lows and euro bond yields down to September 11 levels, but we need to see some of the consumer and business confidence surveys at least beginning to form a base.

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