This time last year, I wrote that the New Year tradition of making forecasts for the year to come was an even more perilous exercise than usual. My reasons at the time were linked to the lack of visibility on the economic situation and the uncertainty on the banking landscape.

The inconsistencies that were predicted by many economists when the euro was introduced, but were masked by the favourable economic situation between 2000 and 2008, have now come to light with the problems in Greece.

In the following, I try to answer some of the main questions people have posted on the blog in the past few months.

The first two quarters of 2009 couldn’t have been more different on the financial markets. While investors exhibited strong risk aversion in the first quarter, the second quarter saw the very same investors return to equities and high yield bonds.

In 2009, the euro's performance to date is enough to qualify it as a weak currency. Indeed, since the start of the year, the single currency has lost around 6% against sterling and some 10% against the dollar and yen.

Since the subprime crisis started in the United States in the middle of last year, the dollar has lost around 16% against the euro falling to lows not seen since the 1970s when the Nixon administration took the dollar off the gold standard.